CarGurus, Inc.

Previous wording

The wind-down of CarOffer was completed and the business was considered abandoned for accounting purposes as of December 31, 2025. We have presented the financial results of CarOffer as discontinued operations in the Unaudited Condensed Consolidated Financial Statements. No assets or liabilities were classified as discontinued operations as of June 30, 2026 or December 31, 2025. No results of operations were classified as discontinued operations for the three and six months ended June 30, 2026. The Unaudited Condensed Consolidated Income Statement for the three and six months ended June 30, 2025, was derived from the Unaudited Condensed Consolidated Income Statement of CarGurus, Inc. as of that date, adjusted for the reclassification of discontinued operations. The Unaudited Condensed Consolidated Statement of Comprehensive Income, Unaudited Condensed Consolidated Statement of Stockholders’ Equity, and the Unaudited Condensed Consolidated Statement of Cash Flows as of June 30, 2025, related to discontinued operations have not been separately reclassified and are included within each for the period referenced.

Current wording

The wind-down of CarOffer was completed and the business was considered abandoned for accounting purposes as of December 31, 2025. We have presented the financial results of CarOffer as discontinued operations in the Unaudited Condensed Consolidated Financial Statements. No assets or liabilities were classified as discontinued operations as of September 30, 2026 or December 31, 2025. No results of operations were classified as discontinued operations for the three and nine months ended September 30, 2026. The Unaudited Condensed Consolidated Income Statement for the three and nine months ended September 30, 2025, was derived from the Unaudited Condensed Consolidated Income Statement of CarGurus, Inc. as of that date, adjusted for the reclassification of discontinued operations. The Unaudited Condensed Consolidated Statement of Comprehensive Income, Unaudited Condensed Consolidated Statement of Stockholders’ Equity, and the Unaudited Condensed Consolidated Statement of Cash Flows as of September 30, 2025, related to discontinued operations have not been separately reclassified and are included within each for the period referenced.

Previous wording

For the three months ended June 30, 2026, we generated revenue of $251.0 million, a 13% increase from $222.0 million of revenue for the three months ended June 30, 2025. For the three months ended June 30, 2026, we generated net income from continuing operations of $49.2 million and Adjusted EBITDA from continuing operations, a non-GAAP financial measure, of $84.7 million, compared to net income from continuing operations of $49.0 million and adjusted EBITDA from continuing operations of $79.4 million for the three months ended June 30, 2025.

Current wording

For the three months ended September 30, 2026, we generated revenue of $258.4 million, a 12% increase from $231.7 million of revenue for the three months ended September 30, 2025. For the three months ended September 30, 2026, we generated net income from continuing operations of $52.8 million and Adjusted EBITDA from continuing operations, a non-GAAP financial measure, of $89.7 million, compared to net income from continuing operations of $51.9 million and Adjusted EBITDA from continuing operations of $82.4 million for the three months ended September 30, 2025.

Previous wording

For the six months ended June 30, 2026, we generated revenue of $494.5 million, a 14% increase from $434.2 million of revenue for the six months ended June 30, 2025. For the six months ended June 30, 2026, we generated net income from continuing operations of $81.4 million and Adjusted EBITDA from continuing operations, a non-GAAP financial measure, of $165.0 million, compared to net income from continuing operations of $91.1 million and Adjusted EBITDA from continuing operations of $148.1 million for the six months ended June 30, 2025.

Current wording

For the nine months ended September 30, 2026, we generated revenue of $752.9 million, a 13% increase from $665.9 million of revenue for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, we generated net income from continuing operations of $134.2 million and Adjusted EBITDA from continuing operations of $254.6 million, compared to net income from continuing operations of $143.0 million and Adjusted EBITDA from continuing operations of $230.5 million for the nine months ended September 30, 2025.

Previous wording

Our Adjusted EBITDA from continuing operations is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA from continuing operations rather than net income from continuing operations, which is the most directly comparable GAAP equivalent. Some of these limitations are that Adjusted EBITDA from continuing operations excludes:

Current wording

Our Adjusted EBITDA from continuing operations is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA from continuing operations rather than net income from continuing operations, which is the most directly comparable GAAP financial measure. Some of these limitations are that Adjusted EBITDA from continuing operations excludes:

Previous wording

impairments, which include non-cash one-time expenses associated with the impairments of operating right of use assets and certain other assets, which may have to be replaced in the future;

Current wording

impairments, which include non-cash expenses associated with the impairments of operating right of use assets and certain other assets, which may have to be replaced in the future;

Previous wording

Because of these limitations, we consider, and you should consider, Adjusted EBITDA from continuing operations together with other operating and financial performance measures presented in accordance with GAAP.

Current wording

In addition, other companies, including companies in our industry, may calculate Adjusted EBITDA from continuing operations differently, which reduces its usefulness as a comparative measure. Because of these limitations, we consider, and you should consider, Adjusted EBITDA from continuing operations together with other operating and financial performance measures presented in accordance with GAAP.

Previous wording

For the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, the following table presents a reconciliation of Adjusted EBITDA from continuing operations to net income from continuing operations, the most directly comparable measure calculated in accordance with GAAP, for each of the periods presented.

Current wording

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, the following table presents a reconciliation of net income from continuing operations, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA from continuing operations.

Previous wording

Sales and marketing expense consists primarily of personnel and related expenses for our sales and marketing team, including salaries, benefits, incentive compensation, commissions, and stock-based compensation; expenses associated with consumer marketing, such as traffic acquisition, brand building, and public relations activities; expenses associated with dealer marketing, such as content marketing, customer and promotional events, and industry events; software subscription expenses; consulting services; amortization of capitalized hosting arrangements; and allocated overhead expenses. A portion of our commissions that are related to obtaining a new contract are capitalized and amortized over the estimated benefit period of customer relationships. Other than commissions amortization, all other sales and marketing expenses are expensed as incurred. We expect sales and marketing expense to fluctuate from quarter to quarter due to seasonality and as we respond to changes in the macroeconomic and competitive landscapes affecting our existing dealers, consumer audience, and brand awareness.

Current wording

Sales and marketing expense consists primarily of employee-related expenses for our sales and marketing team, including salaries, benefits, incentive compensation, commissions, and stock-based compensation; expenses associated with consumer marketing, such as traffic acquisition, brand building, and public relations activities; expenses associated with dealer marketing, such as content marketing, customer and promotional events, and industry events; software subscription expenses; professional service expenses; amortization of capitalized hosting arrangements; and allocated overhead expenses, which include certain of these costs as well as other shared costs. A portion of our commissions that are related to obtaining a new contract are capitalized and amortized over the estimated benefit period of customer relationships. Other than commissions amortization, all other sales and marketing expenses are expensed as incurred. We expect sales and marketing expense to fluctuate from quarter to quarter due to seasonality and as we respond to changes in the macroeconomic and competitive landscapes affecting our existing dealers, consumer audience, and brand awareness.

Previous wording

Product, technology, and development expense consists primarily of personnel and related expenses for our research and development team, including salaries, benefits, incentive compensation, and stock-based compensation; software subscription expenses; consulting services; and allocated overhead expenses. Other than website development, internal-use software, and hosting arrangement expenses, research and development expenses are expensed as incurred. We expect product, technology, and development expense to increase from quarter to quarter as we invest in additional engineering resources to develop innovative new solutions and make improvements to our existing platform.

Current wording

Product, technology, and development expense consists primarily of employee-related expenses for our research and development team, including salaries, benefits, incentive compensation, and stock-based compensation; software subscription expenses; professional service expenses; and allocated overhead expenses, which include certain of these costs as well as other shared costs. Other than website development, internal-use software, and hosting arrangement expenses, research and development expenses are expensed as incurred. We expect product, technology, and development expense to increase from quarter to quarter as we invest in additional engineering resources to develop innovative new solutions and make improvements to our existing platform.

Previous wording

General and administrative expense consists primarily of personnel and related expenses for our executive, finance, legal, people and talent, and administrative teams, including salaries, benefits, incentive compensation, and stock-based compensation; expenses associated with professional fees for audit, tax, external legal, and consulting services; payment processing and billing expenses; insurance expenses; software subscription expenses; and allocated overhead expenses. General and administrative expense is expensed as incurred. We expect general and administrative expense to increase from quarter to quarter as we continue to scale our business.

Current wording

General and administrative expense consists primarily of employee-related expenses for our executive, finance, legal, people and talent, and administrative teams, including salaries, benefits, incentive compensation, and stock-based compensation; professional service expenses; software subscription expenses; general corporate expenses; and allocated overhead expenses, which include certain of these costs as well as other shared costs. General and administrative expense is expensed as incurred. We expect general and administrative expense to remain relatively flat for the remainder of the year and to increase in future periods as we continue to scale our business.

Previous wording

During the three months ended March 31, 2026, we identified a triggering event requiring an impairment test for the 121 First Street lease, which we intend to sublease, primarily due to lower anticipated rental rates. We performed an updated fair value analysis of the lease and subsequently recognized non-cash impairment charges. For the six months ended June 30, 2026, we recognized non-cash impairment charges of $14.7 million related to operating lease right-of-use asset and $4.5 million related to leasehold improvements and furniture and fixtures, which were recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements. For the three months ended June 30, 2026, no impairment charges related to the 121 First Street lease were recognized. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

During the three months ended March 31, 2026, we identified a triggering event requiring an impairment test for the 121 First Street lease, which we intend to sublease, primarily due to lower anticipated rental rates. We performed an updated fair value analysis of the lease and subsequently recognized non-cash impairment charges. For the nine months ended September 30, 2026, we recognized non-cash impairment charges of $14.7 million related to operating lease right-of-use asset and $4.5 million related to leasehold improvements and furniture and fixtures, which were recognized within impairment operating expenses in the Unaudited Condensed Consolidated Income Statements. For the three months ended September 30, 2026, no impairment charges related to the 121 First Street lease were recognized. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

The provision for income taxes consists of federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. For the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position.

Current wording

The provision for income taxes consists of federal and state income taxes in the U.S. and taxes in foreign jurisdictions in which we operate. For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, a provision for income taxes was recognized as a result of the consolidated taxable income position.

Previous wording

For the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, the Unaudited Condensed Consolidated Income Statements were as follows:

Current wording

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, the Unaudited Condensed Consolidated Income Statements were as follows:

Previous wording

For the three months ended June 30, 2026 and 2025 and for the six months ended June 30, 2026 and 2025, the Unaudited Condensed Consolidated Income Statements as a percentage of total revenue were as follows (amounts in the table below may not sum due to rounding):

Current wording

For the three months ended September 30, 2026 and 2025 and for the nine months ended September 30, 2026 and 2025, the Unaudited Condensed Consolidated Income Statements as a percentage of total revenue were as follows (amounts in the table below may not sum due to rounding):

Previous wording

Revenue increased $29.0 million, or 13%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was due primarily to an increase in dealer subscription revenue as a result of growth in QARSD, which was driven by signing on new dealers at market rates, and revenue expansion driven by broader adoption of add-on products, subscription tier upgrades, and like-for-like price increases for existing dealers.

Current wording

Revenue increased $26.7 million, or 12%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was due primarily to an increase in dealer subscription revenue as a result of broader adoption of add-on products, subscription tier upgrades, and signing on new dealers at market rates.

Previous wording

Cost of revenue increased $4.2 million, or 27%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, and represented 8% of total revenue for the three months ended June 30, 2026, compared to 7% of total revenue for the three months ended June 30, 2025. The increase was due primarily to a $2.2 million increase in amortization primarily due to new capitalized website development projects, and a $1.2 million increase in data center and hosting costs driven primarily by dealer subscription revenue growth.

Current wording

Cost of revenue increased $4.3 million, or 26%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025, and represented 8% of total revenue for the three months ended September 30, 2026, compared to 7% of total revenue for the three months ended September 30, 2025. The increase was due primarily to a $2.4 million increase in amortization driven by new capitalized website development projects and a $1.3 million increase in data center and hosting costs due to higher overall usage.

Previous wording

Sales and marketing expense increased $15.0 million, or 18%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was due primarily to a $10.2 million increase in marketing and advertising expense for our performance marketing vendors and brand awareness campaigns and a $4.0 million increase in employee-related expenses due primarily to headcount and merit increases.

Current wording

Sales and marketing expense increased $12.2 million, or 14%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was due primarily to a $9.6 million increase in marketing and advertising expense for our performance marketing vendors and brand awareness campaigns and a $3.3 million increase in employee-related expenses driven by an increase in payroll-related expense resulting from headcount and merit increases and an increase in commissions expense.

Previous wording

Product, technology, and development expense increased $4.4 million, or 13%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was due primarily to a $2.1 million increase in employee-related expenses due primarily to headcount and merit increases, a $1.2 million increase in professional services expense primarily driven by contractor and consulting expense, and a $1.2 million increase in software expense.

Current wording

Product, technology, and development expense increased $4.4 million, or 13%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was due primarily to a $2.6 million increase in employee-related expenses driven by an increase in payroll-related expense resulting from headcount and merit increases, and a $1.3 million increase in software expenses.

Previous wording

General and administrative expense increased $2.9 million, or 12%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase was due primarily to a $2.4 million increase in employee-related expenses due primarily to headcount and merit increases and new stock-based compensation grants, partially offset by completed vesting of existing awards and forfeitures from employee departures.

Current wording

General and administrative expense increased $2.0 million, or 8%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase was due primarily to a $1.9 million increase in employee-related expenses driven by an increase in stock-based compensation expense due to the net impact of new grants, completed vesting of existing awards, and forfeitures from employee departures and an increase in payroll-related expense as a result of headcount and merit increases.

Previous wording

Total other income, net decreased $2.1 million, or 80%, in the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The $1.2 million decrease in interest income was due primarily to lower average cash balances.

Current wording

Total other income, net decreased $1.2 million, or 64%, in the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The $1.1 million decrease in interest income was due primarily to lower average cash balances.

Previous wording

Revenue increased $60.3 million, or 14%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to an increase in dealer subscription revenue as a result of growth in QARSD, which was driven by signing on new dealers at market rates, and revenue expansion driven by broader adoption of add-on products, subscription tier upgrades, and like-for-like price increases for existing dealers.

Current wording

Revenue increased $87.0 million, or 13%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was due primarily to an increase in dealer subscription revenue as a result of subscription tier upgrades, broader adoption of add-on products, and signing on new dealers at market rates.

Previous wording

Cost of revenue increased $8.8 million, or 29%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025, and represented 8% of total revenue for the six months ended June 30, 2026, compared to 7% of total revenue for the six months ended June 30, 2025. The increase was due primarily to a $3.7 million increase in amortization due primarily to new capitalized website development projects, a $2.5 million increase in data center and hosting costs driven primarily by dealer subscription revenue growth, and a $1.3 million increase in spend related to provisioning advertising campaigns on external websites.

Current wording

Cost of revenue increased $13.1 million, or 28%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, and represented 8% of total revenue for the nine months ended September 30, 2026, compared to 7% of total revenue for the nine months ended September 30, 2025. The increase was due primarily to a $6.1 million increase in amortization driven by new capitalized website development projects, a $3.8 million increase in data center and hosting costs due to higher overall usage, a $1.5 million increase in spend related to provisioning advertising campaigns on external websites, and a $1.5 million increase in licensed content for listings.

Previous wording

Sales and marketing expense increased $28.9 million, or 17%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to a $17.7 million increase in advertising and marketing expense for our performance marketing vendors and brand awareness campaigns and an $8.6 million increase in employee-related expenses due primarily to headcount and merit increases.

Current wording

Sales and marketing expense increased $41.1 million, or 16%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was due primarily to a $27.3 million increase in advertising and marketing expense for our performance marketing vendors and brand awareness campaigns and an $11.9 million increase in employee-related expenses driven by an increase in payroll-related expense resulting from headcount and merit increases and an increase in commissions expense.

Previous wording

Product, technology, and development expense increased $7.1 million, or 10%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to a $3.7 million increase in employee-related expenses due primarily to headcount and merit increases, a $2.8 million increase in professional services expense primarily driven by contractor and consulting expense, and a $1.5 million increase in software expense.

Current wording

Product, technology, and development expense increased $11.4 million, or 11%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was due primarily to a $6.2 million increase in employee-related expenses driven by an increase in payroll-related expense resulting from headcount and merit increases, a $3.2 million increase in professional services expense driven by an increase in contractor and consulting expense, and a $2.8 million increase in software expenses.

Previous wording

General and administrative expense increased $4.6 million, or 9%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to a $3.0 million increase in employee-related expenses due to headcount and merit increases and an increase in new stock-based compensation grants, partially offset by completed vesting of existing awards and forfeitures from employee departures. The increase was also due in part to a $1.9 million increase in professional services expense.

Current wording

General and administrative expense increased $6.6 million, or 9%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was due primarily to a $4.9 million increase in employee-related expenses driven by an increase in payroll-related expense as a result of headcount and merit increases and an increase in stock-based compensation expense due to the net impact of new grants, completed vesting of existing awards, and forfeitures from employee departures. The increase was also due in part to a $1.9 million increase in professional service expenses.

Previous wording

Impairment expense increased $19.2 million in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due primarily to the impairment of the 121 First Street lease during the six months ended June 30, 2026. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

Impairment expense increased $19.2 million in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase was due primarily to the impairment of the 121 First Street lease during the nine months ended September 30, 2026. For further discussion of the lease impairment, refer to Note 9 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

Total other income, net decreased $3.8 million, or 71%, in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The $2.6 million decrease in interest income was due primarily to lower average cash balances.

Current wording

Total other income, net decreased $5.0 million, or 69%, in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The $3.7 million decrease in interest income was due primarily to lower average cash balances.

Previous wording

Provision for income taxes remained relatively flat in the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Current wording

Provision for income taxes remained relatively flat in the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Previous wording

As of June 30, 2026 and December 31, 2025, our principal sources of liquidity were cash and cash equivalents of $122.1 million and $190.5 million, respectively. As of June 30, 2026 and December 31, 2025, our borrowing capacity under the 2022 Revolver (as defined below) was $390.6 million.

Current wording

As of September 30, 2026 and December 31, 2025, our principal sources of liquidity were cash and cash equivalents of $164.9 million and $190.5 million, respectively. As of September 30, 2026, our borrowing capacity under the Amended Revolver (as defined below) was $190.6 million. As of December 31, 2025, our borrowing capacity under the 2022 Revolver (as defined below) was $390.6 million.

Previous wording

The cash flows related to discontinued operations for the six months ended June 30, 2025, have not been separated. Accordingly, the Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025, and the following discussions include the results of continuing and discontinued operations. For additional information on discontinued operations, including significant non-cash items and capital expenditures of discontinued operations, refer to Note 3 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Current wording

The cash flows related to discontinued operations for the nine months ended September 30, 2025, have not been separated. Accordingly, the Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025, and the following discussions include the results of continuing and discontinued operations. For additional information on discontinued operations, including significant non-cash items and capital expenditures of discontinued operations, refer to Note 3 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report.

Previous wording

During the six months ended June 30, 2026 and 2025, our cash flows from operating, investing, and financing activities, as reflected in the Unaudited Condensed Consolidated Statements of Cash Flows, were as follows:

Current wording

During the nine months ended September 30, 2026 and 2025, our cash flows from operating, investing, and financing activities, as reflected in the Unaudited Condensed Consolidated Statements of Cash Flows, were as follows:

Previous wording

Our operations have been financed primarily from operating activities. During the six months ended June 30, 2026 and 2025, we generated cash from operating activities of $164.4 million and $141.0 million, respectively.

Current wording

Our operations have been financed primarily from operating activities. During the nine months ended September 30, 2026 and 2025, we generated cash from operating activities of $245.3 million and $212.2 million, respectively.

Previous wording

On September 26, 2022, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent and an L/C Issuer (as defined in the Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time, or the Credit Agreement. The Credit Agreement consists of a revolving credit facility, or the 2022 Revolver, which allows us to borrow up to $400.0 million, $50.0 million of which may be comprised of a letter of credit sub-facility, or 2022 Revolver Sub-facility. The borrowing capacity under the Credit Agreement may be increased in accordance with the terms and subject to the adjustments as set forth in the Credit Agreement. Specifically, the borrowing capacity may be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Credit Agreement) if certain criteria are met and subject to certain restrictions. Any such increase requires lender approval. Proceeds of any borrowings may be used for general corporate purposes. The 2022 Revolver is scheduled to mature on September 26, 2027.

Current wording

On September 26, 2022, we entered into a Credit Agreement with PNC Bank, National Association, as administrative agent and collateral agent and an L/C Issuer (as defined in the Original Credit Agreement), and the other lenders, L/C Issuers, and parties thereto from time to time, or the Original Credit Agreement. The Original Credit Agreement consisted of a revolving credit facility, or the 2022 Revolver, which allowed us to borrow up to $400.0 million, $50.0 million of which could be comprised of a letter of credit sub-facility, or 2022 Revolver Sub-facility. The borrowing capacity under the Original Credit Agreement could be increased in accordance with the terms and subject to the adjustments as set forth in the Original Credit Agreement. Specifically, the borrowing capacity could be increased by an amount up to the greater of $250.0 million or 100% of Four Quarter Consolidated EBITDA (as defined in the Original Credit Agreement) if certain criteria were met and subject to certain restrictions. Any such increase required lender approval. Proceeds of any borrowings could be used for general corporate purposes.

Previous wording

On August 6, 2026, we amended the Credit Agreement to, among other things, (i) reduce our aggregate revolving commitment under the Credit Agreement from $400.0 million to $200.0 million, or the Amended Revolver, and (ii) extend the maturity date of the Amended Revolver from September 26, 2027 to August 6, 2031. Refer to Note 14 of the Unaudited Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information.

Current wording

The Amendment, among other things, (i) reduced the aggregate revolving commitments under the Original Credit Agreement from $400.0 million to $200.0 million, or the Amended Revolver, (ii) extended the maturity date of the Amended Revolver from September 26, 2027 to August 6, 2031, (iii) increased the cap of the Cash-Capped Incremental Facility (as defined in the Amended Credit Agreement) to the greater of $380.0 million and 100% of the trailing Four Quarter Consolidated EBITDA (as defined in the Amended Credit Agreement), and (iv) added a new incurrence-based negative covenant that prohibits the Company from incurring certain indebtedness unless, after giving pro forma effect thereto, the Consolidated Total Gross Leverage Ratio (as defined in the Amended Credit Agreement) does not exceed 6.25:1.00. Except as expressly modified by the Amendment, the material terms of the Original Credit Agreement remain unchanged and continue in full force and effect.

Previous wording

As of June 30, 2026 and December 31, 2025, there were no borrowings and $9.4 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.6 million.

Current wording

As of September 30, 2026, there were no borrowings and $9.4 million in letters of credit outstanding under the Amended Revolver associated with our leases, which reduced the borrowing capacity under the Amended Revolver to $190.6 million. As of December 31, 2025, there were no borrowings and $9.4 million in letters of credit outstanding under the 2022 Revolver Sub-facility associated with our leases, which reduced the borrowing capacity under the 2022 Revolver to $390.6 million.

Previous wording

We believe that our existing sources of liquidity, including access to the Amended Revolver, will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this Quarterly Report. Our future capital requirements will depend on many factors, including our revenue; expenses associated with our sales and marketing activities and the support of our product, technology, and development efforts; activity under the 2026 Share Repurchase Program (as defined below); and our investments in international markets. Cash from operations could also be affected by various risks and uncertainties, including but not limited to macroeconomic effects and other risks detailed more specifically in the “Risk Factors” section in Part I, Item 1A in our Annual Report.

Current wording

We believe that our existing sources of liquidity, including access to the Amended Revolver, will be sufficient to fund our operations for at least the next 12 months from the date of the filing of this Quarterly Report. Our future capital requirements will depend on many factors, including our revenue; expenses associated with our sales and marketing activities and the support of our product, technology, and development efforts; activity under the 2026 Share Repurchase Program (as defined below) and the 2027 Share Repurchase Program (as defined below); and our investments in international markets. Cash from operations could also be affected by various risks and uncertainties, including but not limited to macroeconomic effects and other risks detailed more specifically in the “Risk Factors” section in Part I, Item 1A in our Annual Report.

Previous wording

During the three months ended June 30, 2026, we repurchased and retired 946,971 shares of our Class A common stock for $29.2 million, exclusive of commissions and excise tax, at an average cost of $30.88 per share, under the 2026 Share Repurchase Program. During the six months ended June 30, 2026, we repurchased and retired 6,288,683 shares of our Class A common stock for $204.2 million, exclusive of commissions and excise tax, at an average cost of $32.48 per share, under the 2026 Share Repurchase Program. As of June 30, 2026, we had remaining authorization to purchase up to $45.8 million of our Class A common stock under the 2026 Share Repurchase Program.

Current wording

During the three months ended September 30, 2026, we repurchased and retired 592,502 shares of our Class A common stock for $20.8 million, exclusive of commissions and excise tax, at an average cost of $35.03 per share, under the 2026 Share Repurchase Program. During the nine months ended September 30, 2026, we repurchased and retired 6,881,185 shares of our Class A common stock for $225.0 million, exclusive of commissions and excise tax, at an average cost of $32.70 per share, under the 2026 Share Repurchase Program. As of September 30, 2026, we had remaining authorization to purchase up to $25.0 million of our Class A common stock under the 2026 Share Repurchase Program.

Previous wording

During the three months ended June 30, 2025, we repurchased and retired 11,004 shares of our Class A common stock for $0.3 million, exclusive of commissions and excise tax, at an average cost of $29.89 per share under the Original 2025 Share Repurchase Program. During the six months ended June 30, 2025, we repurchased and retired 5,930,439 shares of our Class A common stock for $184.5 million, exclusive of commissions and excise tax, at an average cost of $31.12 per share under the Original 2025 Share Repurchase Program.

Current wording

During the three months ended September 30, 2025, we repurchased and retired 3,233,649 shares of our Class A common stock for $110.7 million, exclusive of commissions and excise tax, at an average cost of $34.23 per share under the 2025 Share Repurchase Program. During the nine months ended September 30, 2025, we repurchased and retired 9,164,088 shares of our Class A common stock for $295.2 million, exclusive of commissions and excise tax, at an average cost of $32.22 per share under the 2025 Share Repurchase Program.

Previous wording

Net cash provided by operating activities of $164.4 million during the six months ended June 30, 2026, was due primarily to consolidated net income of $81.4 million, adjusted for $26.6 million of stock-based compensation expense for equity awards to employees, $20.2 million of impairment primarily related to the 121 First Street lease, $15.1 million of depreciation and amortization expense, and $9.7 million of amortization of deferred contract costs. Net cash provided by operating activities was also due to a $13.0 million decrease in prepaid expenses, prepaid income taxes, and other current assets driven primarily by a decrease in prepaid income taxes and a $6.5 million increase in accounts payable due to timing of vendor payments, and was offset in part by a $9.7 million increase in deferred contract costs.

Current wording

Net cash provided by operating activities of $245.3 million during the nine months ended September 30, 2026, was due primarily to consolidated net income of $134.2 million, adjusted for $39.6 million of stock-based compensation expense for equity awards to employees, $23.8 million of depreciation and amortization expense, $20.2 million of impairment primarily related to the 121 First Street lease impairment, $14.5 million of amortization of deferred contract costs and $12.6 million of deferred taxes. Net cash provided by operating activities was also due to a $14.8 million decrease in prepaid expenses, prepaid income taxes, and other assets primarily due to a decrease in prepaid income taxes. Net cash provided by operating activities was offset in part by a $13.5 million increase in deferred contract costs due to commission capitalization and a $7.4 million increase in accounts receivable due to the timing of payments.

Previous wording

Net cash provided by operating activities of $141.0 million during the six months ended June 30, 2025, was due primarily to consolidated net income of $61.4 million, adjusted for $32.6 million of impairments related to the prior year impairment of the CarOffer reporting unit, $25.9 million of stock-based compensation expense for equity awards to employees, $13.3 million of deferred taxes, $13.2 million of depreciation and amortization expense, and $7.8 million of amortization of deferred contract costs. Net cash provided by operating activities was also due to an $8.9 million decrease in prepaid expenses, prepaid income taxes, and other current assets, a $6.7 million increase in accounts payable, and a $6.0 million increase in lease obligations, and was offset in part by a $9.4 million increase in deferred contract costs.

Current wording

Net cash provided by operating activities of $212.2 million during the nine months ended September 30, 2025, was due primarily to consolidated net income of $106.1 million, adjusted for $38.6 million of stock-based compensation expense for equity awards to employees, $32.6 million of impairment related to CarOffer, $20.6 million of depreciation and amortization expense, $14.0 million of deferred taxes, and $12.0 million of amortization of deferred contract costs. Net cash provided by operating activities was also due to a $4.8 million increase in lease obligations primarily due to rent expense exceeding rent payments and the timing of tenant improvement allowance receipts. Net cash provided by operating activities was offset in part by a $13.7 million increase in deferred contract costs due to commission capitalization and an $8.5 million increase in prepaid expenses, prepaid income taxes, and other assets primarily due to the impact of the One Big Beautiful Bill Act.